Sherry Madera, CEO of CDP, said: “As headlines determine snap judgements and historic moments, every one of us must take stock and ask ourselves ‘do we really welcome this?’.
Low expectations may have been exceeded, but is that really our measure of success? Yes, the first Global Stocktake has ended with a potentially momentous global agreement to transition away from fossil fuels. While this is absolutely to be celebrated, COP28 has ultimately failed to deliver a Stocktake that fulfils its potential. We are left without a crystal clear, actionable roadmap for implementation for all actors on climate and nature.
To start with the positive: the call to transition away from fossil fuels, and for non-state actors to increase their ambition in this area, sends a clear signal to companies and investors. The era of fossil fuels is over. The Stocktake reaffirms what CDP data has long shown: robust policies and regulation are needed to harmonize finance streams and ensure financial flows are now rapidly directed away from fossil fuels and toward renewable energy.
Almost 50% of the 575 financial institutions that disclosed in 2023 reported holding ~US$ 9 trillion in fossil fuel financing across their portfolios alone – equivalent to the combined GDP of Japan and Germany. This small snapshot is a damning indictment of where investment sits, and a clear signal of the work that needs to be done to shift and harmonize financial flows. Quality disclosure data will be absolutely essential in supporting governments to direct policies and resources in the right areas and CDP is committed to putting our 20+ years of data and insights at their disposal, to drive forward the transition, effectively track progress and hold laggards to account.
“Calls to” governments to triple renewable energy capacity are welcome, but a weak term is open for interpretation in what should be a robust call to action. Our data shows that government action and policy in this area are an absolute necessity and sorely lacking. Only 10% of disclosing companies have a renewable energy consumption target and a third have absolutely no energy consumption from renewable sources.
The final Stocktake makes little reference to the transparency and accountability of non-state actors. A Stocktake should be a measurement based on data. More words without data and transparency gets us nowhere. By discounting these crucial economic actors, we risk being left with a restricted view of the problem and little means to hold all entities, in particular, those with disproportionate impacts on climate change, to account as the cycle continues. As it stands, as little as 24% of disclosing companies are on track to meet their targets.
There is no time to waste in taking rapid action based on what has been handed to us. At CDP we will continue to stocktake every day, to support companies, cities, states and regions to measure their environmental impacts and ensure that disclosure data is actionable. The transition journey for companies, cities, states, and regions is clear: report environmental risks, opportunities, dependencies, and impacts. Set science-based targets for climate and nature. Develop a transition or action plan to achieve it. And disclose annually to assess performance and accelerate action. A baseline and a target are the absolute minimums required. CDP will continue to incentivize ambitious action in line with science and harmonize standards to ensure quality data enables us to reach the goals of the Paris Agreement, ensure a livable planet and resilient economy.”